Barnett sees risk in local content laws

Premier Colin Barnett says there are "grave risks" in pursuing new laws to ensure local firms gain work from major projects, after the steel industry and unions launched a campaign to keep resources fabrication and manufacturing jobs in Western Australia.

The Australian Steel Institute, the Association of Professional Engineers, Scientists & Managers, Australia, and the Australian Metal Workers Union launched the WA Jobs from WA Resources campaign this morning, which will seek new legislation to ensure work that local industry had the capacity and capability to perform is done in WA.

The campaign will feature television, radio and print advertising, and its first phase will culminate in a joint industry-union protest at Parliament House on March 15.

But Mr Barnett told reporters after the launch that introducing legislation to ensure work stayed in Western Australia was a dangerous approach.

"There are grave risks in pursuing a legislative approach," Mr Barnett said.

"It runs the risk of taking more work offshore.

"Bear in mind we are talking about contracts which are between private resources companies and private manufacturing companies.

"The government has got a very clear interest in making sure work does stay in Western Australia and there are skills and job opportunities available for the Western Australian public, but its very dangerous territory when governments get involved in direct private sector financial arrangements.

"I don't favour legislation at all. I think that would be a very poor way of proceeding and would probably make the companies recede even further from giving work locally."

Mr Barnett said steel fabrication workshops across WA would experience an uptick in work as the year wore on, as major projects move from preliminary works to full construction phases.

"Regardless of anything I do or don't do, there will be more work flowing through those shops in the second half of this year as projects move from clearing sites and putting concrete down to actually erecting steel, that's the inevitable factor," he said.

"It's important that these companies have a good flow of work, they have to be cost competitive so they have to make sure they can meet the needs of industry, and I think it's important that there be a steady flow of work.

"One of the problems is that it's very volatile, one minute it's busy, the next minute there is no work, so we're trying to smooth out the flow of work."

But opposition spokesperson for state development, Mark McGowan, said $300 million worth of steel fabrication work for Chevron's $44 billion Gorgon project had already gone offshore.

"This $300million contract would have created many hundreds of local fabrication jobs, but we see no action from Mr Barnett in relation to local content," Mr McGowan said.

This morning's launch followed Premier Colin Barnett's meeting of industry leaders yesterday, which was designed to convince them to award more work to the local manufacturing and contracting sector.

On Tuesday, Mr Barnett toured manufacturing facilities in Kwinana and Cockburn with Commerce Minister Simon O'Brien.

ASI state manager James England said the impact of work being sent offshore on the local engineering and manufacturing sectors was "devastating".

"People might be surprised to learn that, despite a large number of huge resources projects being under construction up north, most of our fabrication workshops are almost empty and some businesses are close to collapse," Mr England said.

"Many of the businesses under threat are family businesses that have been in WA for generations and they simply can't believe that they are being bypassed for this work.

"Our local fabrication businesses have the capacity and capability to do a lot of the work required, but they are not getting a fair opportunity.

"As a result, they can't create the skilled jobs and apprenticeships that should be flowing during this resources construction boom."

APESMA state president Zaneta Mascarenhas agreed, and said with most of the work for major projects being done overseas, the state was in the midst of an economically damaging "brain drain".

"With most of the engineering for our major projects now being done overseas, WA engineers have to uproot themselves and their families and go overseas if they want to help design the projects," Ms Mascarenhas said.

"There is a core engineering capability that is draining because the design of our Australian LNG resources is going overseas.

"This brain drain leaves our young engineers without senior people to learn from, with this potentially creating a serious long term skills problem across Western Australia's engineering industry.

"And, if our LNG projects are designed and procured here, our projects are more likely to be built here. Major projects designed overseas are difficult to be fabricated here due to foreign specifications.

"This makes it hard for local businesses to tender for their work."

The full announcement regarding the campaign launch is below:

Local industry and unions launch campaign to save WA's skilled jobs

Australia's peak steel industry group has joined forces with local unions to launch a campaign to save WA's skilled engineering and fabrication jobs.

The Barnett Government is allowing the State's big resources projects to send their skilled work offshore. Many local fabrication businesses are now in danger of closing down, and WA's engineers have to go overseas if they want to help design the projects.

AMWU State Secretary Steve McCartney said the Barnett Government had set a low bar for the resources industry, with the sending of skilled work offshore now becoming the norm. "In 2009, Colin Barnett signed an agreement with Oakajee Port and Rail that will see the steel fabrication and engineering for that project done in China," Mr McCartney said.

"At about the same time, Mr Barnett promised that projects like Gorgon would fill up WA's workshops for years.

"However, with Chevron following Mr Barnett's Oakajee lead and sending nearly all of Gorgon's engineering and fabrication offshore too, it is hard to see how Mr Barnett's promise is going to be kept."

ASI State Manager James England said the impact on the local fabrication industry of the big resources projects sending their skilled work offshore was devastating.

"People might be surprised to learn that, despite a large number of huge resources projects being under construction up north, most of our fabrication workshops are almost empty and some businesses are close to collapse," he said.

"Many of the businesses under threat are family businesses that have been in WA for generations and they simply can't believe that they are being bypassed for this work.

"Our local fabrication businesses have the capacity and capability to do a lot of the work required, but they are not getting a fair opportunity.

As a result, they can't create the skilled jobs and apprenticeships that should be flowing during this resources construction boom."

APESMA State President Zaneta Mascarenhas said the off-shoring of engineering work had serious implications for the WA economy.

"With most of the engineering for our major projects now being done overseas, WA engineers have to uproot themselves and their families and go overseas if they want to help design the projects," she said.

"There is a core engineering capability that is draining because the design of our Australian LNG resources is going overseas.
"This brain drain leaves our young engineers without senior people to learn from, with this potentially creating a serious long term skills problem across Western Australia's engineering industry.

"And, if our LNG projects are designed and procured here, our projects are more likely to be built here. Major projects designed overseas are difficult to be fabricated here due to foreign specifications. This makes it hard for local businesses to tender for their work.'"

UnionsWA Secretary Simone McGurk said the social impact of the Barnett Government allowing the big mining, oil and gas companies to send their skilled work overseas could last for generations.

"With the Barnett Government allowing the vast majority of the engineering and fabrication work for our major projects to go offshore, the number of young people starting apprenticeships and traineeships has plummeted," she said.

"At the same time, youth unemployment in the South Western suburbs surrounding the Kwinana strip, where many of our fabrication businesses are located, has almost doubled.

"So, despite the talk of supposed 'skills shortages' there are actually plenty of young Western Australians available to work.

"The problem is that our fabrication businesses are not getting the pipeline of work they need to create the jobs and apprenticeships our young people need to develop their skills.

"It would be completely unacceptable to most Western Australians that our natural gas and iron ore reserves are being used to create skilled jobs and opportunities for young people in South East Asia, while young people in Perth have trouble getting apprenticeships."

Mr McCartney said the WA Jobs From WA Resources campaign would seek new laws from the State Government to ensure the work that local industry had the capacity and capability to perform, was done in WA.

"We all understand that our major resources companies comply with the laws of the many countries in which they operate," he said.

"Other countries like Canada and the United States have successfully demanded skilled work be performed locally before giving approvals to mine or awarding civil contracts.

"What we want is for our State Government to work as hard as governments around the world in getting the best deal for WA from the use of our natural resources.

"We have one shot in the locker - our natural resources are finite and, if we don't use them to train our kids, then we won't have a skilled workforce to create new industries and opportunities once the mining boom is over.

"We want WA Jobs From WA Resources - what can be made here, should be made here."

The WA Jobs From WA Resources campaign will feature television, radio and print advertising, as well as a dedicated campaign website and Facebook page.

The first phase of the campaign will culminate in a joint industry-union community march on Parliament House on 15th March.

The rally will see, for the first time in WA, local business owners walk side-by-side up St George's Terrace with local engineers, metal trades people and concerned members of the community.

The rally will be heavily promoted around the State, with a particular focus on the State Government held marginal seats of Riverton, Southern River and Jandakot.

Many families in these communities rely on the Kwinana strip to produce skilled jobs and apprenticeships for their kids and have a lot to lose if the Barnett Government doesn't secure skilled work from our major projects.